Honda 2007 Annual Report Download - page 95

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The loans maturing through 2031 and through 2030 are
either secured by property, plant and equipment or subject to
collateralization upon request, and their interest rates range
from 0.69% to 16.17% per annum at March 31, 2007 and
weighted average interest rate on total outstanding long-term
debt at March 31, 2006 and 2007 is 4.35% and 3.96%,
respectively. Property, plant and equipment with a net book
value of approximately ¥22,592 million and ¥23,654 million
($200 million) at March 31, 2006 and 2007, respectively,
were subject to specific mortgages securing indebtedness.
Furthermore, finance subsidiaries-receivables of approxi-
mately ¥8,993 million and ¥1,931 million ($16 million) at
March 31, 2006 and 2007 respectively, were pledged as
Certain of the Company’s subsidiaries have entered into cur-
rency swap and interest rate swap agreements for hedging
currency and interest rate exposures resulting from the issu-
ance of long-term debt. Fair value of contracts related to
currency swaps and interest rate swaps is included in other
assets/liabilities and/or other current assets/liabilities in the
consolidated balance sheets, as appropriate (see note 16).
Unless a right of setoff exists, the offsetting of assets and
liabilities is not made in the consolidated balance sheets.
At March 31, 2007, Honda had unused line of credit facili-
ties amounting to ¥1,127,722 million ($9,553 million), of
which ¥390,278 million ($3,306 million) related to commercial
paper programs and ¥737,444 million ($6,247 million) related
to medium-term notes programs. Honda is authorized to
obtain financing at prevailing interest rates under these
programs.
At March 31, 2007, Honda also had committed lines of
credit amounting to ¥840,889 million ($7,123 million), none of
which was in use. The committed lines are used to back up
the commercial paper programs. Borrowings under those
committed lines of credit generally are available at the prime
interest rate.
As is customary in Japan, both short-term and long-term
bank loans are made under general agreements which pro-
vide that security and guarantees for present and future
indebtedness will be given upon request of the bank, and
that the bank shall have the right to offset cash deposits
against obligations that have become due or, in the event of
default, against all obligations due to the bank. Certain
debenture trust agreements provide that Honda must give
additional security upon request of the trustee.
collateral by a financial subsidiary for certain loans.
At March 31, 2006, ¥205,573 million of commercial paper
borrowings were classified as long-term, as it is the respec-
tive finance subsidiary’s intention to refinance them on a
long-term basis and it has established the necessary credit
facilities to do so. During fiscal year 2007, management
decided not to classify the commercial paper as long term
since management has no intention of refinancing them on a
long-term basis. The weighted average interest rate on com-
mercial paper at March 31, 2006 was approximately 4.32%.
Medium-term notes are unsecured, and their interest rates
range from 0.63% to 4.66% at March 31, 2006 and from
0.77% to 5.38% at March 31, 2007.
The following schedule shows the maturities of long-term debt for each of the five years following March 31, 2007 and
thereafter:
Ye n
Years ending March 31: (millions)
2008 ¥0,775,409
2009 888,650
2010 485,705
2011 317,979
2012 186,726
After five years 26,683
1,905,743
Total ¥2,681,152